Reference no: EM132628965
Hartwell Company distributes the service department overhead costs directly to producing departments without allocation to the other service departments. Information for the month of January is presented as follows:
Maintenance Utilities
Overhead costs incurred............................... P18, 700 P9, 000
Service provided to:
Maintenance department.......................... - 10%
Utilities department................................ 20% -
Producing department A........................... 40% 30%
Producing department B........................... 40% 60%
Problem 1: The amount of utilities department costs distributed to producing department B for January should be___.
a. 3,600
b. 4,500
c. 5,400
d. 6,000
Problem 2: Assume instead that Hartwell Company distributes the service departments' overhead costs based on the step-down method. Which of the following methods is true?
a. Allocate maintenance expense to departments A and B
b. Allocate maintenance expense to departments A and B and the utilities department.
c. Allocate utilities expense to the maintenance department and departments A and B.
d. None of the above.
Problem 3: under the step-down method, how much of Hartwell's utilities department cost is allocated between departments A and B?
a. 9,900
b. 10,800
c. 12,740
d. 27,700
Problem 4: Assume that Hartwell Company distributes service department overhead costs based on the reciprocal method, what would be the formula to determine the total maintenance costs?
a. M=P18,700+ .10U
b. M = P9.000 + -20U
c. M= P18,700+.30U+.40A+.40B
d. M = P27.700 + .40A + .408
Problem 5: Hartwell Company distributes utilities department overhead costs based on the reciprocal method, what would be the formula to determine the total utilities costs?
a. U=P18,700+.10M
b. U = P9,000 + .20M
c. U = P18,700 + .30M + .40H+.40B
d. U = P27,700 + .40A + .40B
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